The Swedish Prosecution Authority said in a statement that Marianne Ny 'has decided to discontinue the investigation.'

Swedish prosecutors today said they had dropped an investigation of WikiLeaks founder Julian Assange over a rape allegation, but British police said he would still be arrested if he left the Ecuadorean embassy in London where he has been holed up.

Assange, 45, took refuge in the embassy in 2012 to avoid extradition to Sweden over the rape allegation, which he denies.

He feared Sweden would hand him over to the United States to face prosecution over WikiLeaks' publication of thousands of classified military and diplomatic documents in one of the largest information leaks in U.S. history.

The Swedish prosecutor's office said in a statement it had decided to end its investigation. In a court document seen by Reuters, chief prosecutor Marianne Ny said there were no further avenues to pursue to take the investigation forward.

However, London police issued a statement after the Swedish announcement making clear Assange was still wanted by them.

"Westminster Magistrates' Court issued a warrant for the arrest of Julian Assange following him failing to surrender to the court on the 29 June 2012," the police said.

"The Metropolitan Police Service is obliged to execute that warrant should he leave the Embassy."